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It took a voter revolt 29 years ago to force the insurance industry to start pricing auto insurance in California based on how well and how much you drive, instead of who you are or where you live. Before that, drivers in inner cities and other “undesirable” zip codes (read: low-income, minority) had to pay a fortune for auto insurance, if they could buy it at all. Prop 103’s insurance reforms changed that. Or at least they were supposed to.

But a dozen civil rights and economic justice organizations had to write Insurance Commissioner Dave Jones today, calling on him to open a public, transparent hearing into allegations of auto insurance price discrimination that were reported last month by ProPublica and Consumer Reports.

Their report found that eight auto insurance companies in California are marking up prices by as much as 32% for drivers in minority neighborhoods as compared to white neighborhoods with similar risk.

Price discrimination has long been a favorite industry tactic for redlining.

“A long and continuing history of racial inequality in transportation, including racially discriminatory insurance redlining, makes it imperative that you open a proceeding to determine whether the civil rights of residents of communities of color are being violated, and that the proceeding be full, fair and public,” wrote the groups.

The California Department of Insurance questioned the study’s findings, but launched an internal investigation into the pricing allegations last month after the twelve groups and consumer organizations wrote seeking action. Today’s letter, however, rejected this internal investigation as a “half-step” because it will not allow for public review of the data or examination of insurance industry executives under oath. Without a full-blown public hearing, consumers in California will have no say in, and might never know how, the Department determines if discrimination is happening.

“This issue is just too important to have the public see conclusions without having any basis for understanding what went into them,” said Richard Marcantonio, Managing Attorney of Public Advocates Inc, one of the dozen groups.

“Given the gravity of ProPublica’s findings of widespread discrimination by auto insurers in violation of voter-approved consumer protections in California, an internal investigation is not enough,” said Angela Glover Blackwell, CEO of PolicyLink, another of the groups that co-signed today’s letter.

According to the ProPublica/Consumer Reports study, California did better than the three other states reviewed – Illinois, Missouri and Texas. Nevertheless, the report found that Farmers, Liberty Mutual, Nationwide and USAA charged at least 10% more in riskier minority zip codes than in white zip codes with the same risk. Liberty Mutual was the worst offender with a 32% disparity in some zip codes.

Passed by California voters in 1988, Proposition 103 prohibited insurance companies from basing auto insurance rates primarily on ZIP Code. It requires the most important factor in a driver's rates be: her driving record, experience and number of miles driven per year. Insurers are allowed to make the number and severity of accidents where a driver lives, both of which are related to how risky an area is, secondary factors as long as they are not more important than how you drive. The report suggests that some insurers may be violating those provisions.